My goal is to buy a heavy civil construction company in the Montana-North Dakota area. The ideal company operates at about 65 employees in the busy season to start and to grow each year beyond that. It has just enough assets to be able to do million-dollar projects and has a very high prospect of growth. The Montana and North Dakota areas have high potential of being very lucrative because of the continued growth in both states. Of course, these will not be the only states in which work is sought, contracts will also be considered in Idaho, South Dakota, Texas, Wyoming, and Utah. The company I seek to requisition has a well-established start in the heavy civil industry along with other business expansion opportunities.
I have been working for almost 12 years in the oilfield and construction industry and have been a manager in all my experience. My work experience includes, DOT Administration, Safety Administration, HR Administration, Project Management, Estimating, Accounts Receivables, Accounts Payables, Payroll Administration, Supervisor, Manager, Process coordinator, IT manager, Material Procurement, Quality Control, Environmental Administration, Office Manager, Dispatcher, Field Coordinator, Equipment/Asset Manager, Safety Instructor, and marketing. Previous to working in the oilfield I was a restaurant manager for 10 years and a substitute teacher for 12 years at the same time in my small community.
I envisioned finding an employer in whom I could help grow their company and become a leader of that respected company. But I found that the companies I had dedicated my hard work and long hours to did not treat their employees well and were often dishonest with their customers and employees. Recently I had an epiphany that if I am going to work long hours and dedicate all my time and efforts to a company I might as well do it for my own company. And grow a company that will be successful and help those who work for it become successful also. A company who cares about the quality of their work and who values their employees, who is honest in all their dealings and who deals justly with all involved.
Prospective Company
A heavy civil construction company that specializes in mine reclamation, military base site work and roads, demolition, railroad, highway projects, and stream reconstruction. They also own and operate a landfill and land farm and possess an in-house gravel testing laboratory and portable testing trailers along with gravel crushing operations. The Company is located next to an air force base and has procured much of their work from being close to this area. Over 90% of projects involve government agencies.
They have over 7 million dollars in used equipment, and all dozers and graders are equipped with Top Con GPS grade control systems. GPS equipment is a necessity for most projects that involve extensive grading and sloping.
Company currently leases a variety of pits and quarry locations across central Montana which allows their bid numbers to be incredibly competitive.
Currently the company has a strong cash position and is ultra conservative in incurring debt. There are no long-term liabilities at the present time. It does not have or use a line of credit but rather relies on self-financing of seasonal fluctuations.
The company had incurred its worst year in recent history in FY 2017-2018 due to lack of a sufficient level of job flow. It showed a modest recovery in FY 2018-2019. Presently there is a strong backlog of work, and it is anticipated in the proforma that further recovery will occur in the current fiscal year. (Currently seeking updated info from company)
This is just a summary of what the prospective company has to offer. For the right person who is willing to invest in me and this company I will disclose all information about the prospective company and will seriously consider investor proposals and financial advice in procuring the company of interest.
Analysis of prospective company
This company has already proven that it can last, and it certainly has the potential to grow. The current management are ready to sell and retire so their investments are tight. Their 2020 gross revenue was 11 million with a 22 % gross profit margin. With the right strategy in place that is paced and based on continuous growth at the right speed this company could easily bring in a revenue of 40 million within 5-10 years or less.
Current Products and Services
The company has done what is available in the market at the time and has not had a specific focus. Much of the work is performed on a design-build basis as the company is highly involved in the design and specification of projects.
· Class IV Commercial Landfill
· Petroleum Contaminated Soil Land Farm Treatment area
· Building and other demolition
· Parking lots
· Structural building project site work
· Heavy highway and other road construction and reconstruction
· Subdivision and military housing development-streets and utilities
· Minute man missile site work
· Railroad Mainline
· Railroad ballast construction
· Railroad emergency and derailment cleanups
· Railroad ballast crushing
· Box culvert construction
· Rip rap production
· Riverbank and streamside reconstruction
· Extensive mine & oil field reclamation (over 60 projects)
· Forest service road building and crushing services
· Mining repository construction and lining
· Landfill cell construction
· Sewage lagoon construction and lining
· Underground storage tank installations and removals
· Aboveground double wall storage installations
· Windfarm
Product and Services Outlook
The ability to expand and contract work will increase exponentially when this business becomes “woman owned”. A Disadvantage Business Owner has a higher advantage on getting the bid price for their work because many government projects require a certain percentage of the work be done by DBEs.
Focus will be to continue with current services at the start of acquiring company. Moving forward working toward expanding in the following areas:
· Adding on a concrete and asphalt plant since land, heavy industrial zoning, vast sand and gravel pit access along with other elements are already in place
· Pursue all bids available that are upcoming because of federal & state infrastructure “stimulus” spending, including approved mega funding for air force base improvements in which the company is located by.
· Pursue more work in the private sectors such as windfarms and oilfield pad construction
Sales and Marketing
Currently the company has not spent a lot of money on marketing and advertising since most work has been won on a competitive bid basis. Expansion on this area would bring about a more diverse customer base than just government. Money would be invested in building a website and on a HR software that allows the company to advertise the need for employees in diverse ways. Other marketing money would go into creating company image on equipment, vehicles, real estate, and apparel.
Workforce upgrade
Expanding the workforce will be a priority so that more work can be obtained. This will be a major focus in the beginning of transition. Because some key players of this company are aging and looking to retire when the company is purchased there will need to be a focused investment on recruiting more in the workforce. There will be a need for superintendents, foreman, equipment operators, laborers, project engineer, project managers, asset/logistics managers, safety personnel, controller, human resource, admins, mechanics etc. From the memorandum I received there would be an immediate need of funds for Human Resource and advertisement in the form of job listings. Also noticed that a Controller will need to be hired within a 1–2-year time frame.
The above organizational chart is a representation of how the company will be organized. There are many employees who will stay on with the company when the transition is made. I plan to do all I can to maintain current staff and operations as they are and make transitions and expansions gradual so that all can adapt to a growing workforce and workload.
Funding Request Explanation
The funds that are needed currently are in commitment only by “Letter of Commitment/Intent to Invest”. The amount needed is at a minimum of $1,000,000.00. This will be obtained by either one investor or several to reach the goal. By obtaining the minimum amount it will prove to the company financial advisors that I am a very serious interested party with the funds if needed. The prospective company has stated “that the sale will be privately negotiated. Proposals will be accepted, reviewed, and negotiated in a timely and efficient manner. All proposals will be kept confidential. As individual circumstances and the benefits of a given transaction vary substantially from buyer to buyer, establishing concrete pricing information is not meaningful. The market will ultimately determine the price for this Company.”
The owners believe that the best next stage owner for the company will possess at least the following characteristics:
· Creating a culture that welcomes and takes care of its valued workforce
· Creates a culture that takes care of its customers
· Can work through an extended management transition
Along with these standards they are requiring the prospective buyer demonstrate financial capacity prior to meeting with the owners and shareholders themselves.
An acceptable offer for this company would be between $5-6 million. Depending on how the owners are wanting to transition and strategy of the sale will determine if the rest of the money will be obtained by loan, investments, or payments to current owners. With the responsible approach this company has been managed and the low debt status this company is a perfect investment for growth and prosperity.
The amount of investment terms will be discussed on a case-by-case basis. Based on the amount of investment and intent of investor. Options available are:
· A minimum of 10% increase in the amount invested
· Repayment within 5 years (depends on amount invested)
· Own shares in the company
· Become a financial advisor and strategist for company
More details can be given once I have been able to meet with Owners and start negotiations. For now, I am limited in my information and under “confidentiality agreement” which is why I have not divulged the Name of the company or the place in which it resides. As stated earlier for serious investors I will be allowed to share more details. When I can obtain a meeting with the owners, I will be able to provide a business plan for what needs to be done to develop this company into a great success. As stated above I am seeking investors to build the 1 million needed with “letters of commitment”.
The Risks
I would like to say that there are no risks. But unfortunately, there are always risks in business. The current market for construction is at a high. The amount of government spending for infrastructure and the market for other constructions is ever increasing. The biggest risk I can foresee currently is obtaining enough workforce to get the projects built. The entire country is struggling with obtaining enough help in the labor department of their companies. And it will be no different for me. This problem would inhibit how we can grow.
I believe that with my 15 years’ experience in HR and hiring that I can come up with creative ways to contract qualified and dedicated employees. This will take a commitment to investing in employees by offering them exceptional benefit packages that are outside the “norm”. This could include but is not limited to health, dental, vision, retirement, disability, profit sharing, educational investment, training programs that allow the employee to advance in areas of interest and a building a commitment to the company. Redefining the job descriptions and learning to create new and inventive ways for today’s fast paced and busy employee’s lifestyle. The government has also created programs to help with training the new generation. These are part of the project bid packages and can be of great advantage when trying to find qualified people. Sometimes the best people are ones who are trained in the way “your company” does things.
And last but certainly not least….finding the right software and technology to streamline processes in construction. Focusing on ones that help to reduce the amount of workforce needed and are cost effective. There is a lot of software that is existing that could help streamline processes. The ideal software will focus on much more than just one area of the business. It should connect from the beginning (estimating/hiring) to the field, to the office, to the end of project. I plan on investing in these types of software or seek ways to invent the correct software to help ease the amount of workforce that is required for construction.
Exit Strategy
I intend to make this business successful. My life and my family’s life depend on this success. If the company takes a downturn before we just close the doors, I will do all that I can to keep it going. This could include
· Selling assets to keep operating
· Readjusting business model to continue making money
· Manage debts so as not to exceed profit and leave room for the unexpected expenditure
· Exhaust all options to stay in business
Closing
In closing I am seeking people who would like to take a chance on me and this company. I will deal fairly with any who are seeking the opportunity and am open to any ideas to help me be successful. I understand that taking on a business such as this is not easy and will require a lot of work and long hours. I have helped grow 4 companies in the last 11 years and am ready to help my own succeed. I have a lot of great ideas, experience and relationships to be able to successfully expand and overcome the challenges of today’s market. As stated, before in this presentation I am seeking 1 or more individuals who will help me reach my goal of 1 million or more to obtain the funds needed to make this purchase a reality and game changer in the construction world. That is why I have called it “Constructing Life”. Because that is what a good business is all about.
